◎ Basic information about this public offering.

The subscription is abbreviated as "China Petroleum" and the subscription code is "780857".

1, stock type

The shares issued this time are domestic listed RMB ordinary shares (A shares) with a par value of RMB 65,438 +0.00 per share.

2. Issue scale and structure

The number of A shares issued this time does not exceed 4 billion shares. Before the callback mechanism was launched, the number of offline issues did not exceed 654.38+02 billion shares, accounting for about 30% of the number of this issue; The remaining shares were issued online, accounting for about 2.8 billion shares, accounting for about 70% of the number of shares issued this time.

The offline issuance is organized and implemented by the co-sponsors (lead underwriters) of this issuance; Online issuance is carried out simultaneously on the last day of offline issuance, and investors implement it through the trading system of Shanghai Stock Exchange, and pay the subscription fee according to the upper limit of the price range.

After the offline and online issuance, the issuer and the co-sponsor (lead underwriter) will negotiate and determine the issue price within the issue price range according to the accumulated bidding inquiry and with reference to the issuer's fundamentals, H-share price, valuation level of comparable companies and market environment. The final issue price will be announced in the Announcement on Pricing, Offline Issuance Results and Online Winning Rate on October 30th, 2007 (T+2).

3. Online distribution target

Natural persons, legal persons and other institutions holding stock account cards of Shanghai Stock Exchange (except those prohibited by laws and regulations of People's Republic of China (PRC) (China) and other regulatory requirements that issuers must comply with). The securities proprietary accounts of the co-sponsors (lead underwriters) of this offering shall not participate in the subscription of this offering.

Step 4 buy price

The issue price range of this issue is 15.00 yuan/share-16.70 yuan/share (inclusive). Investors who subscribe for online funds must subscribe according to the upper limit of the issue price range (16.70 yuan/share).

The price-earnings ratio range corresponding to this price range is:

19.7 1 times -2 1.95 times (the earnings per share is calculated by dividing the net profit before and after deducting non-recurring gains and losses in 2006 audited by an accounting firm and determined according to China Accounting Standards by the total number of shares before this issuance).

20. 15-22.44 times (earnings per share is calculated by dividing the net profit before and after deducting non-recurring gains and losses audited by accounting firms in 2006 by the total number of shares after this issuance, and the total number of shares after this issuance is calculated by 4 billion shares).

5. Time of purchase

On June 26th, 2007, 10 (T day), it will be held at the normal trading hours of SSE (9: 30am to 165438+ 0: 30pm, and from13: 00pm to15: 00pm). In case of major emergencies or force majeure factors affecting this issuance, it shall be handled according to the notice on the day of subscription.

6. Important date arrangement of this issuance

I. Important timing of this offering

Trading day issuance arrangement

T-4 10 year122 October published the summary of the letter of intent for issuance, the issuance arrangement and preliminary inquiry.

Announcement "

Initial query start date

T-265438+ Deadline for Preliminary Inquiry100 on October 24th.

Release "Online Roadshow Announcement"

T-165438+1October 25th published the preliminary inquiry results and the announcement of the issue price range, offline.

Announcement of issuance and announcement of online issuance.

Offline subscription payment start date

Online roadshow

T 65438+ online fund subscription date 001October 26th.

Deadline for offline subscription and payment

T+ 1 65438+ The issue price of this issue will be determined on1October 29th.

Determine whether to start the online and offline callback mechanism.

Determine the final online/offline issuance quantity after callback (if any)

Online purchase and distribution

T+2 65438+ 10. Announce the pricing, offline distribution results and online winning rate on October 30th.

Online subscription funds began to be refunded.

Issue lottery tickets online

T+3 1 01October 31day, the results of online fund subscription were announced.

Unfreeze online subscription funds

Note: 1 and t are online issuance subscription dates.

2. The above dates are working days. In case of major emergencies affecting the issuance, the sponsor (lead underwriter) will timely announce and modify the issuance schedule.

7. Proposed listing place: Shanghai Stock Exchange.

◎ Historical evolution, reorganization and restructuring of the issuer:

(a) the establishment of the company

According to the Company Law of People's Republic of China (PRC), the Special Provisions of the State Council on Overseas Stock Issuance and Listing of Limited by Share Ltd and other relevant laws and regulations, and with the approval of the Reply of the former People's Republic of China (PRC) State Economic and Trade Commission (No.1999), China Petroleum Group initiated the establishment of the Company exclusively. Our company has completed the registration in the State Administration for Industry and Commerce on1October 5th, with the registration number of 1999+065438.

(2) The content of the promoters and their invested assets.

According to the reorganization agreements 1999 and 165438, China Petroleum Group invested most of its assets, liabilities and rights and interests related to the above-mentioned main business when the company was established, including: 13 crude oil and natural gas exploration and production enterprise and 1 exploration office; 15 petroleum refining and petrochemical production enterprises; 2 1 sales company; 1 Company engaged in long-distance pipeline transportation of crude oil, natural gas and refined oil and other supporting pipelines previously owned by China Petroleum Group; 2 scientific research institutions; According to 23 foreign cooperation agreements on the exploration and development of onshore oil and gas resources, these resources belong to all the rights and interests of China Petroleum Group according to these contracts and relevant laws of China.

◎ Issuer's main business:

(a) the issuer's main business profile.

Our company is the largest producer and seller of oil and gas in China, one of the largest sales companies in China and one of the largest oil companies in the world. In the "Top 250 Global Energy Enterprises in 2006" published by Platts Energy, an authoritative organization in the global energy field, the company ranked sixth and ranked first in the Asia-Pacific region for five consecutive years; Ranked seventh in the "Top 50 World Oil Companies in 2005" published by Petroleum Intelligence Weekly. Ranked first in the "Top 50 Asian Enterprises in Business Week" published by Business Week in 2006; And was elected as "the most profitable company in Asia in 2006 (the first place)" published by Asian Finance magazine. Our company is committed to developing into a competitive international energy company and one of the important producers and sellers of petroleum and petrochemical products in the world.

The company is widely engaged in various businesses related to oil and natural gas, mainly including: exploration, development, production and sales of crude oil and natural gas; Refining, transportation, storage and sales of crude oil and petroleum products; Production and sales of basic petrochemical products, derivative chemical products and other chemical products; Natural gas, crude oil, refined oil transportation and natural gas sales.

Our company is the largest producer of crude oil and natural gas in China. The company's oil and gas resources occupy a prominent position in China, with several large oil and gas regions such as Daqing, Liaohe, Xinjiang, Changqing, Tarim and Sichuan, among which Daqing oil region is the largest oil region in China and one of the most productive oil and gas producing regions in the world. As of June 5438+February 3, 2006, the proven reserves of crude oil and natural gas in our company were 1 162 billion barrels and 15 1406 billion cubic meters respectively, accounting for 70.8% and 85.5% of the total of the three major oil companies in China. In 2006, the company's crude oil and natural gas output were 830 million barrels and 44.95 billion cubic meters respectively, accounting for 66.4% and 78.5% of the total of the three major oil companies in China. In the first half of 2007, the company's crude oil output and natural gas sales were 420 million barrels and 22.60 billion cubic meters respectively.

Our company is one of the largest producers and sellers of petroleum products in China. The company has formed a number of large refineries, including three 10 million-ton refineries, and has a terminal sales network covering the whole country. As of June 65438+February 3, 20061,the total distillation capacity of our company was 940 million barrels, accounting for 37.7% of the whole country. In 2006, the company produced about 683 1.8 million tons of gasoline, diesel oil and kerosene, accounting for 38.6% of the whole country, and sold more than 74.904 million tons of products, accounting for 43% of the whole country. In the first half of 2007, the company produced 35.545 million tons of gasoline, diesel oil and kerosene respectively, and sold more than 40.93 million tons of products. By June 30, 2007, there were 65,438+08,630 gas stations owned and operated by our company, franchised and owned by China Petroleum Group or jointly owned by a third party, and supervised and supported by our company. In recent years, the company's retail market share of refined oil products has been rising. In 2004, 2005 and 2006, the market share of the company's refined oil retail volume was 29.0%, 365,438+0.8% and 34.7% respectively.

Our company is one of the major producers and sellers of chemical products in China. The vast majority of chemical plants in our company are integrated refining and chemical enterprises, which is conducive to ensuring the supply of raw materials, improving production efficiency and strengthening output elasticity, thus enhancing cost competitiveness. The chemical products such as ethylene and synthetic resin produced by our company occupy an important market share in China. By June 65438+February 3, 20061,the company's ethylene production capacity was 2.63 million tons, accounting for 26.6% of the whole country. In 2006, the company's ethylene output was 2.068 million tons, accounting for 22.0% of the whole country. In the first half of 2007, the company produced 654.38+305,000 tons of ethylene.

Our company is the largest natural gas transportation and seller in China. Our company has obvious resource advantages, occupying a dominant position in the natural gas market in China, basically forming a wide-ranging natural gas backbone pipe network, and forming a regional natural gas supply network in northwest, southwest, north China, central China, Yangtze River Delta and other regions, which is conducive to grasping the market opportunities of the rapid growth of China's natural gas market. As of June 5438+February 3, 20061,the length of natural gas pipeline owned and operated by our company is 20590 kilometers, accounting for 77.8% of the whole country. In 2006, the company's natural gas sales reached 38.42 billion cubic meters, an increase of 29.0% over 2005, accounting for 73.6% of the country. In the first half of 2007, the company's natural gas sales volume was about 22.30 billion cubic meters, an increase of 20.5% over the same period last year. In addition, the company is also in the market leading position in the pipeline transportation of crude oil and refined oil. By the end of 2006, the length of crude oil and refined oil pipelines owned and operated by the company were 9620km and 2413km respectively.

Our company's overseas strategy has made great progress. By the end of June 2006, our company was engaged in oil and gas exploration and production in 1 1 countries and regions overseas. The proven reserves of overseas crude oil and natural gas accounted for 5.5% and 1.5% of our company respectively, and the overseas oil and gas output accounted for our company respectively in 2006.

The company's business covers all key links in the petroleum and petrochemical industry, from the upstream exploration and production of crude oil and natural gas to the downstream refining, chemical industry, pipeline transportation and sales, forming a complete business chain with optimized, efficient and integrated operation, greatly improving the company's operating efficiency, reducing costs and enhancing the company's core competitiveness and overall anti-risk ability.

competitive edge

The company has the following main competitive advantages:

1 is the largest producer and seller of oil and gas in China, and its oil and gas resources occupy a prominent position in China;

2. It has advanced oil and gas exploration and development technology, further consolidating the leading edge in the industry;

3. It is one of the largest producers and sellers of petroleum products in China, with a huge market and sustained and rapid growth;

4. It has the largest and widest oil and gas pipeline network in China, which strengthens the market influence and penetration;

5. Optimizing the efficient upstream and downstream integrated business chain is conducive to resisting the risk of industry fluctuation and improving operational efficiency;

6. International strategic layout is conducive to obtaining sustainable oil and gas resources and improving long-term competitiveness;

7. Strong financial strength and sound financial structure;

8. Have an experienced management team and a good corporate governance structure;

9. Have a well-known brand, reputation and market image at home and abroad.

Top ten shareholders:

Name of shareholder Number of shares held (10,000 shares) in the reporting period as a percentage of total share capital (%) Nature of shares

2007- 10-26 Halbis Capital Management (Hong Kong) Co., Ltd. 35766.60 0.20 Circulating H shares.

Bank of JPMorgan Chase. Limited by Share Ltd 106779.59 0.58 Circulating H shares

Fidelity management and consulting company. Research 103254.44 0.56 Circulation of H shares

2007- 10-26 Berkshire Hathaway Company circulated H shares on 237940.40 1.30.

2007- 10-26 Credit Suisse Asset Management Australia Limited 66 109.58 0.36 circulating H shares.

2007- 10-26 Fidelity Investment Management Co., Ltd. (Hong Kong) 326910.57 0.18 circulating H shares.

Capital research and consulting company. Management Company 5 1855.80 0.28 Circulating H shares

2007- 10-26 Templeton Asset Management (Singapore) Co., Ltd. 108382.29 0.59 Circulating H shares.

2007- 10-26 Barclays Global Investor, not applicable to 45929.29 0.25 circulating H shares.

2007- 10-26 China Petroleum and Natural Gas Corporation 15792207.78 86.29 State-owned shares.